Minnesota Attorney General Keith Ellison has shut down a St. Paul nonprofit that allegedly misspent thousands of dollars in donations intended to fund school supplies for children in need.
Under an enforcement action filed Wednesday in Ramsey County District Court, Welch Charities must dissolve and its president, Arturo Eguia, is banned from operating a charity, having access to charitable assets or soliciting donations in Minnesota.
Eguia, 46, of St. Paul, started the all-volunteer nonprofit in 2013 to provide school supplies to low-income children. It raised money through Indian Bike Week, an annual motorcycle ride and festival.
Welch Charities must turn over its assets to another nonprofit before dissolving. In an interview Thursday, Eguia said he is giving the money to a Native American church in South Dakota.
Eguia denied misspending the charity's funds and said he was unable to access documentation from years ago to prove the expenses were for charitable costs.
"It wasn't used for any personal funds," he said.
Eguia said he was in the process of dissolving the nonprofit on his own before the state took action.
His attorney, Ferdinand Peters, said the state couldn't prove the allegations because the investigation by Ellison's office was incomplete. As part of the settlement, Eguia and Welch Charities neither admit nor deny the allegations.
Peters said Eguia "had done maybe some sloppy bookkeeping, but he didn't do anything wrong that was illegal."
The Attorney General's Office, he said, wants "to show an example to other charities, but sometimes they get it wrong and they smear a charity through the mud that just didn't have the money to continue to fight them to actually go to a trial."
A spokesperson for the Attorney General's Office said the investigation took 15 months and "the facts ... are beyond sufficient to establish the violations that Mr. Eguia himself acknowledged by signing the settlement."
The Attorney General's Office, which regulates nonprofits in the state, began investigating Welch Charities in 2021 after it failed to file required documents. The state said the charity wasn't properly managed, followed no policies or procedures and had a board that never met or conducted oversight.
According to the state, registration fees from the annual motorcycle ride, merchandise sales and donations amounted to more than $142,000 from 2017 to 2021. Of that sum, $12,200 was spent on charitable items, according to the court document. An additional nearly $37,000 allegedly was used to pay Eguia's personal expenses, including more than $5,900 in cash withdrawals, $1,434 on hotels, $878 on restaurants and bars, and $253 on a pest control company.
Eguia "took advantage of Minnesotans' and motorcycle riders' trust and generosity," Ellison said in a statement. "Instead of using donations well-intentioned people made to Welch Charities to help low-income school children, Eguia instead used the money intended for children to enrich himself, travel on the charity's dime and prop up his for-profit business."
Eguia said all expenses were incurred as the cost of running the charity. For instance, he said, he hired the pest control company to rid his yard of mosquitoes before an outdoor fundraiser he hosted. He said he also has photos and videos of the annual school supply distributions.
